How to calculate average cost basis
Average cost basis is a weighted average, not a simple average of the prices. You multiply each buy's price by its quantity to get the cost of that lot, add up the cost of every lot, then divide by the total number of coins. A large buy at a low price pulls your average down far more than a tiny buy at a high price — which is exactly why dollar-cost averaging into dips lowers your blended entry. This calculator handles the weighting automatically across up to four purchases.
Why DCA investors live by this number
Dollar-cost averaging means buying a fixed amount on a schedule regardless of price. Over time you accumulate more coins when prices are low and fewer when they are high, and your average cost settles below the simple average of the market. Knowing your blended average tells you your true break-even, frames every price move as a gain or loss against your real entry, and stops you anchoring on the price of a single early purchase.
Average cost and your taxes
Some jurisdictions and accounting methods use average cost basis to compute gains when you sell, while others require FIFO or specific identification. Even where average cost is not the legal method, it is the cleanest mental model for tracking a position you keep adding to. Use the figure here for planning, then confirm the accepted method with your tax software or accountant before filing.
Keeping your average accurate
Add every purchase, including small recurring buys and fees, to keep the average honest. If you sell part of the position, your remaining quantity changes but your average cost per coin usually stays the same under the average-cost method. Re-run this calculator whenever you add a new lot. Crypto exchanges differ on maker/taker fees, funding rates and maintenance-margin tiers, and tax rules vary by country. Treat these results as a planning baseline and confirm against your exchange statements and a qualified tax professional before acting.
Frequently asked questions
How do I calculate average cost for crypto?
Multiply each buy's price by its quantity, sum those costs, and divide by the total coins bought. This gives a quantity-weighted average price.
Is average cost the same as a simple average of prices?
No. Average cost weights each price by how many coins you bought at it, so larger purchases influence the average more than smaller ones.
Does dollar-cost averaging lower my cost basis?
It smooths it. Buying on a schedule across high and low prices typically produces an average below the market's simple average, especially when you keep buying through dips.
Can I use average cost for taxes?
In some jurisdictions, yes; others require FIFO or specific identification. Use this figure for planning and confirm the accepted method before filing.